About (StrategyTester) on MT4

Hi,

I'm looking for an explanation about how (StrategyTester) work.

I have this EA with a precise setup, let's call it "x". That setup give a lost of -2208 pips in 2008 (1 january 2008 to 31 december 2008).

If I make the EA (buy instead of sell & sell instead of buy) the setup "x" for the very same period have a profit of only +340 pips.

Important: the TP & SL are the very same and "StrategyTester" does not take in count spread.

The question is, how come I don't have the very same amount of pips since the setup is the very same?

Same thing for 2009.
No inversion = -1659
With the inversion = +88

Still for 2009 but another pair.
No inversion = -2454
With inversion = -193

Once again, all I did is reverse order... So, at the end, what can explan this huge difference?

Thanks

simple logic I suppose... when you inverse buy and sell, did you inverse the TP and SL levels too?

say you originally have a buy with a 40 pip SL and a 60 pip TP

when you inverse it to a sell, it should become 60 pip SL and 40 pip TP.

if you didn't do that, then you are not inverting right.

even so, spread comes into play. so there's never a clear cut inversion.

regards,
Zen

Hi Zen,

I forgot to mention it but the TP & SL are the very same and "StrategyTester" does not take in count spread.

There's something else... Something very wrong...

you mean your SL and TP is 50/50?

what's the ratio here.

Exactly, the TP and the SL are exactly the same.

That's why I don't understand why (StrategyTester) achieve such different result.

And that's what this thread is about.

There's necessarily an explanation for that.

But for now, it look like (StrategyTester) is not reliable... Not at all.

What's the number of pips you set for TP and SL?

since you have the reports of both original and inverse setups, how about doing a bit of sampling.

spot a losing trade in the original setup and find its equivalent in the inverse setup according to the time of trade opening and see why the inverse failed too.

Market order sell at the Bid and buy at the Ask. That will account for some of the discrepancies you're seeing. Because MT4 does not record the spread differences in history, the StrategyTester use the current market spread at the time of testing.

Which means there's a good chance you'll get different results when testing at different times if the spread at both times of testing is different. Spread does play a part in backtesting, I'm not sure why you claim it doesn't.

Also, if you're testing on the M1 (or M5) chart with low SL and TP, you are going to get different result each time you run the test. because M1 is the smallest candle recorded for the platform. The Strategy Tester will radomly choose how the price moves throughout that 60 seconds (so long as the Open, High, Low, Close of that candle is adhered to).

I'm pretty sure there's a logical explanation to the results you're seeing. perhaps if you post the EA here, you can get an answer.

regards,
Zen

So I have the answer I was looking for...

The huge difference is caused by the broker spread. The EA BUYS based on the Ask and SELLS based on the BID, Because of this there is a higher likely hood of the SL being hit first before the TP even if you set equal values on each (especially if your stops and targets are small). So even if you reverse the trades will still have a higher likelyhood of hitting the SL first before the TP because of the broker spread.

The SPREAD even if it is very small make a huge overall difference